Two Midprice Apparel Makers Pursue Calvin Klein Purchase
By TERI AGINS, BRUCE ORWALL and SALLY BEATTY
Staff Reporters of THE WALL STREET JOURNAL

It's one obsession that Calvin hasn't resolved.

Three years after designer Calvin Klein and partner Barry Schwartz first put their prestigious fashion house on the auction block, it is being aggressively wooed by two midprice apparel makers. VF Corp., the maker of Lee and Wrangler Jeans, and Phillips-Van Heusen Corp., the New York dress-shirt kingpin whose brands include Van Heusen, Geoffrey Beene and Arrow, are competing to buy the fashion company that became synonymous with tony American sportswear and racy ads for perfume and underwear.

Those familiar with the situation say that neither VF nor Phillips-Van Heusen is near closing a deal. However, both companies are in discussions with Mr. Klein and Mr. Schwartz, the two friends and partners who originally co-founded the 35-year-old business as a coat manufacturer. A Calvin Klein spokeswoman declined to comment.

The intensity of the current talks suggests that Messrs. Klein and Schwartz are rapidly growing closer to finally selling their business, which consists mainly of the design studio and a number of licenses for Calvin Klein products. In 2000, Calvin Klein pulled itself off the market after failing to find a buyer or a strategic investor, despite having shopped itself throughout Europe and the U.S. for a year.

At the time, Warnaco Group Inc. -- maker of CK jeans and underwear -- came closest to purchasing Calvin Klein for a price estimated at around $900 million. However, the negotiations ultimately collapsed when the parties couldn't agree how and where the Calvin Klein trademark would be used. Eventually, Warnaco Group filed for Chapter 11 bankruptcy protection. Indeed, some industry executives and investment bankers are skeptical as to whether the Calvin Klein fashion house will pull the trigger on a deal given its unsuccessful past flirtations with suitors.